Honda Q1 profits plunge 38 per cent

Honda reported a plunge of 38 per cent in first quarter profit as a strong yen and a parts shortage following March’s earthquake and tsunami in Japan continue to hammer production totals.

In a release issued Thursday, the automaker also said it would also lay off nearly 600 workers at two damaged facilities in Japan.

Net profit for the first quarter of 2011 dwindled to $545 million as revenue tumbled nearly three per cent to 2.9 per cent to $25 million.

“The March quake was the biggest reason for declining profit. We simply could not produce cars due to parts shortages after the quake,” said Honda spokesman Tomohiro Okada.

Production after the March 14 disasters has stalled for Honda and other Japanese manufacturers. Honda's domestic production in Japan was shuttered for nearly a month resulting in a production loss of over 58,000 units.

Combining the production woes with a slumping sales performance globally, down 21 percent at the same time last year, and it was certainly a quarter to forget for Honda.

One bright spot was Chinese and North American markets where vehicle sales have picked up of late. North American totals jumped nearly 8 per cent to over 356,000 in Q1.

Honda Canada sold over 15,000 units in March making for a 5.6 per cent jump over March 2010.

The company did not offer full year sales forecasts with the first quarter results.